Correlation Between SHIN-ETSU CHEMICAL and Polyplex (Thailand)
Can any of the company-specific risk be diversified away by investing in both SHIN-ETSU CHEMICAL and Polyplex (Thailand) at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SHIN-ETSU CHEMICAL and Polyplex (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIN ETSU CHEMICAL and Polyplex Public, you can compare the effects of market volatilities on SHIN-ETSU CHEMICAL and Polyplex (Thailand) and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SHIN-ETSU CHEMICAL with a short position of Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIN-ETSU CHEMICAL and Polyplex (Thailand).
Diversification Opportunities for SHIN-ETSU CHEMICAL and Polyplex (Thailand)
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SHIN-ETSU and Polyplex is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SHIN ETSU CHEMICAL and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) and SHIN-ETSU CHEMICAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SHIN ETSU CHEMICAL are associated (or correlated) with Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of SHIN-ETSU CHEMICAL i.e., SHIN-ETSU CHEMICAL and Polyplex (Thailand) go up and down completely randomly.
Pair Corralation between SHIN-ETSU CHEMICAL and Polyplex (Thailand)
Assuming the 90 days trading horizon SHIN-ETSU CHEMICAL is expected to generate 2.93 times less return on investment than Polyplex (Thailand). But when comparing it to its historical volatility, SHIN ETSU CHEMICAL is 3.4 times less risky than Polyplex (Thailand). It trades about 0.04 of its potential returns per unit of risk. Polyplex Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Polyplex Public on August 25, 2024 and sell it today you would earn a total of 11.00 from holding Polyplex Public or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIN ETSU CHEMICAL vs. Polyplex Public
Performance |
| Timeline |
| SHIN ETSU CHEMICAL |
| Polyplex (Thailand) |
SHIN-ETSU CHEMICAL and Polyplex (Thailand) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIN-ETSU CHEMICAL and Polyplex (Thailand)
The main advantage of trading using opposite SHIN-ETSU CHEMICAL and Polyplex (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIN-ETSU CHEMICAL position performs unexpectedly, Polyplex (Thailand) can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Polyplex (Thailand) will offset losses from the drop in Polyplex (Thailand)'s long position.| SHIN-ETSU CHEMICAL vs. Apple Inc | SHIN-ETSU CHEMICAL vs. Apple Inc | SHIN-ETSU CHEMICAL vs. Apple Inc | SHIN-ETSU CHEMICAL vs. Apple Inc |
| Polyplex (Thailand) vs. Goosehead Insurance | Polyplex (Thailand) vs. SHIN ETSU CHEMICAL | Polyplex (Thailand) vs. ZURICH INSURANCE GROUP | Polyplex (Thailand) vs. Japan Post Insurance |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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